US-based containership owner Matson could be a beneficiary of the woes at Hanjin Shipping, according to a report from Stifel analyst Ben Nolan.
Hanjin Shipping’s decision on Wednesday to enter receivership has effectively stopped the company from offering cargo services between Asia and North America. Several US ports have blocked Hanjin’s ships due to concerns about their ability to pay fees. Likewise, Hanjin vessels face the threat of arrest from unpaid creditors.
Earlier this year, Hanjin began offering an expedited shipping service from Shanghai to the US West Coast port of Long Beach, which competed with a 10-day sailing service on the same route from Matson. But Hanjin’s departure from the market may mean more cargo shifts to Matson, Nolan says.
“While the ultimate impact of the Hanjin fallout remains to be seen, we believe (Hanjin’s) service offering is almost certainly no longer going to be competitive to Matson, which should be in a strong position to recapture that market share,” the report say.
Nolan says Hanjin appeared to take market share from Matson, which itself noted a 15% decrease during the first half of this year relative to the first half of 2015 in the volumes of outbound China containers.
Nolan says Matson’s fiscal-year earnings will be down $0.63 per share in 2016 from 2015, largely because of the impact of this trade. Although Nolan has not upped his earnings outlook, Matson could “drive up utilisation, (and the) potential impact on earnings is material.”
